City IT contractors paid £50 per hour

City IT contractors are being paid £50 per hour again for the first time since 2001, according to reseach by iProfileStats and the Association of Technology Staffing Companies (ATSCo).

The research is evidence of the strong recovery in City IT departments as merger and acquisition spending, which slumped after the dot-com boom, has been replaced by an increase in IT expenditure on security and compliance work.

City IT contractors were last paid £50 per hour in June 2001, according to the research.

ATSCo chief executive Ann Swain called it "a psychologically significant milestone".

She added in a statement: "2006 could be the year when the ghosts of the dot-com era are finally laid to rest and IT pay in the City tops the £54 per hour record set during the height of the boom."

At the peak of the dot-com boom in December 2000, IT contractors working in the financial services sector earned a record £54 per hour on average. During 2002, as the market bottomed out, IT contractors in the City took home less than £35 per hour.

According to ATSCo, financial institutions spent heavily on IT security in 2005 and will continue to do so this year. Spending on security accounted for 13 per cent of IT budgets last year, up from 11 per cent in 2004.

Pay for IT security experts rose by 22 per cent last year.

Swain said: "As financial services companies step up spending on security to meet rising threat levels, IT security skills are now attracting the kind of premiums reminiscent of Java programmers during the dot-com boom."

Compliance work is also giving IT salaries a big boost. She said: "The financial reporting processes of most organisations are totally driven by IT systems and Sarbanes-Oxley has generated huge amounts of work as IT staff have worked to realign systems. The CIO's role in sign-off of financial data has changed almost beyond recognition in the last few years."